Many consumers are amazed when they learn that banks are preparing a budget for credit and checking whether a loan applicant can afford the loan they are applying for. The fact is, there would be much less rejection of credit requests if consumers themselves did a budget for credit before making an application.
Control income and expenses with the budget book
Unfortunately, keeping a household book is not for everyone, although it could make a significant contribution to reducing debt. Evidence shows that consumers who keep a household book fall into the debt trap much less often than those who simply live the day and get the money from the machine when needed.
If you don’t have an overview of your monthly income and expenses, you are actually latently in danger of getting into debt.
How the budget book is kept
Specifically, that is up to everyone. While all the fussy people take each supermarket till apart, it is enough for others to list the expenses as they were made. This alone gives you a good overview. But if you keep the budget book to find sources where you can save, you should take apart every receipt.
The budget invoice for credit is then the summarized result from the budget book. Here the expenses are deducted from the income. What is left is the freely disposable income. The freely disposable income must of course then be greater than the rate from the loan that is to be applied for.
What many do not know is that certain types of income, which are included in the household bill, do not count as attachable income for banks. Such income as unemployment benefit, child benefit, maintenance, sick pay or other wage replacement benefits are not included in the household bill. That is why it happens time and again that the household bill, which is made by loan seekers alone, looks very different from the bank budget bill. Of course, all the benefits mentioned are funds that are available to a family and can also be spent, but they are not taken into account when it comes to determining the attachable income. If a borrower does not pay his installments, the bank can only get the installments from the attachable income. The garnishment exemption limit for one person is currently just under 1,000 USD. Those who only earn so much have no attachable income and are not creditworthy.
When the budget bill for credit doesn’t work
As soon as the household bill is not in the “green zone”, the creditworthiness is automatically restricted. It also happens that unemployed people or Hartz IV recipients are not creditworthy on their own. Those who receive wage replacement benefits will only get a loan if they can provide a suitable guarantor.
Budget better with finances
Some loan seekers could save their inquiries if they started making their own household bills beforehand or if they were a little more familiar with bank practices. Debt would decrease if consumers were more prudent when it came to purchases financed through a loan. You cannot have everything and there are many consumer goods that you should only buy if you have the money in your account.